Federal Judge Critical of Firm's Fee Petition in Custody Case

In the current economic crisis, requests for attorney fees are being examined even more closely. A federal judge has sharply rebuked a team of lawyers from Fox Rothschild for filing an “excessive” fee petition after winning an international custody case, saying their bill of more than $163,000 in fees and expenses was simply too large for a “garden variety” custody battle.

The Opinion

U.S. District Judge Lawrence F. Stengel wrote in his 11-page opinion in Clarke v. Clarke, CIVIL ACTION NO. 08-cv-690, E.D. Pa., Dec. 10, 2008, that he could not justify “an attorneys' fee award of this size in a case of this nature.” Stengel said the fee petition from Fox Rothschild “provides no real discussion of why five attorneys were necessary to present this case.”

Although the firm argued that each of the five lawyers handled “an integral and necessary part” of the case, Stengel was unimpressed, saying: “We might add 'excessive and overwrought' to 'integral and necessary' as adjectives used to describe the 'management' of this case.” Fox Rothschild partner Judy McIntire Springer said in an interview that she “respectfully disagrees” with the judge's characterization of the case, and that the fees “were not excessive and we stand by them.”

The Case

Springer led a team that filed suit under the Hague Convention on behalf of Michael Clarke of Australia, alleging that his wife, Kristen Clarke, had taken their two children, Nathan, 5, and Grace, 2, to the United States and refused to return. Kristen Clarke, who was born in the United States, responded by claiming in court papers that the children would be in “grave danger” if returned to Australia because, she alleged, Michael Clarke had sexually abused his son.

In May, Stengel ruled in favor of Michael Clarke, concluding that the allegations of sexual abuse had not been proven and had stemmed from the “overtly suggestive” techniques of a Pennsylvania psychologist whose practices “were designed to lead [Nathan] to say that his father abused him.” The psychologist, Joanne Cohen Hamilton, had testified that “play therapy” in which Nathan would draw pictures, act and play games, revealed evidence of sexual abuse.

Testimony 'Not Credible'

Stengel flatly rejected Hamilton's testimony, finding that she “began with a conclusion and worked backward in an effort to build a supporting record.” As a result, Stengel said, “I found her testimony not worthy of credibility.” Stengel ordered that both children be returned to Australia within 20 days.

Kristen Clarke initially appealed Stengel's ruling, but later dropped the appeal. A court in Australia later awarded Michael Clarke full custody of both children and ordered that Kristen Clarke's visits with them must be supervised. As the prevailing party, Michael Clarke was entitled to an award of attorney fees and costs under the International Child Abduction Remedies Act.

However, when his lawyers at Fox Rothschild filed their fee petition, Kristen Clarke's newly retained lawyers from Dechert cried foul, arguing that the fees were excessive and far beyond what their client is able to pay. Dechert attorneys Thomas K. Johnson II and John S. Ghose argued that Fox Rothschild overstaffed the case, sending four lawyers to attend the three-day hearing before Stengel in April. Johnson and Ghose also said the Fox Rothschild lawyers duplicated each other's work, resulting in unnecessary fees.

Now Stengel has sided with Dechert, finding that the fees charged by Fox Rothschild were simply too high for a case that ultimately came down to just a handful of legal and factual disputes. “Michael Clarke certainly incurred attorneys' fees,” Stengel wrote, “but it is hard to believe that $163,505.89 in fees and expenses was 'necessary.'”

The Fees

The Fox Rothschild team billed for the services of five attorneys to prepare and present their case in a 2 1/2-day hearing, Stengel noted, as well as for research, telephone conferences and the preparation and filing of a petition and a memorandum of law. “There was no discovery, no significant motions and the legal and factual issues were not highly complicated,” Stengel wrote. The hearing involved testimony from just six witnesses, Stengel noted, including both parents, a psychologist for each side and two witnesses from Australia.

'Remarkable Entries'

Stengel found that the Fox Rothschild bill included “some remarkable entries,” including more than $9,500 for audiovisual specialists. However, the “truly disturbing aspect” of the bill, Stengel said, was the $128,983.50 claimed for time spent on the case by the Fox Rothschild attorneys. As lead counsel, Stengel said, Springer billed 196.5 hours at $345 per hour, and was assisted by four “supporting counsel” who billed at rates ranging from $235 to $485 per hour.

Under the law, Stengel said, the court's task was to decide what fees are “clearly inappropriate” ' an inquiry that requires a consideration of Kristen Clarke's financial circumstances as well as her motivation in creating the need for a Hague Convention petition. Stengel found that Kristen Clarke's decision to keep the children in Pennsylvania “was not proper,” but that she had “acted in the belief that she was doing the right thing.”

That belief, Stengel said, “could have been affected by any number of factors including stress ' the influence of family in Pennsylvania, a misinterpretation of her son Nathan's behavior and misplaced accusations against Mr. Clarke, to name a few.” Furthermore. Kristen Clarke's financial circumstances “appear to be dire,” Stengel said, because she is not currently employed.

Nevertheless, the Fox Rothschild lawyers argued in their brief that any analysis of Kristen Clarke's financial status must take into account the fact that the couple is in divorce proceedings and that she stands to be awarded half of a marital estate worth more than $700,000 in Australian dollars, or about $525,000 in U.S. dollars. “It would be unfair to [Michael Clarke] to have to pay his counsel fees out of his share of the assets, while [Kristen Clarke] would enjoy the full share of the equity when this litigation resulted from her conduct,” they wrote.

In an interview, Springer said she disagrees with Stengel's description of the case as “garden variety” because it involved cross-border custody issues and “serious allegations of child sexual abuse.” Springer said she and her team had a “complete victory” in which their client secured a “complete exoneration” from “the ugliest allegations imaginable.” Proving Michael Clarke's innocence, she said, requiring poring over hours of audiotapes of Nathan Clarke's therapy sessions, as well as working with an expert and a lawyer in Australia. The case was “properly staffed” with partners, associates and technical staff, Springer said, and the bills “reflect the proper amount.”

Springer said she intends to abide by Stengel's order and submit a new and reduced bill that responds to the judge's concerns.

Shannon P. Duffy is courthouse reporter for The Legal Intelligencer, an Incisive Media sister publication of this newsletter.

In the current economic crisis, requests for attorney fees are being examined even more closely. A federal judge has sharply rebuked a team of lawyers from Fox Rothschild for filing an “excessive” fee petition after winning an international custody case, saying their bill of more than $163,000 in fees and expenses was simply too large for a “garden variety” custody battle.

The Opinion

U.S. District Judge Lawrence F. Stengel wrote in his 11-page opinion in Clarke v. Clarke, CIVIL ACTION NO. 08-cv-690, E.D. Pa., Dec. 10, 2008, that he could not justify “an attorneys' fee award of this size in a case of this nature.” Stengel said the fee petition from Fox Rothschild “provides no real discussion of why five attorneys were necessary to present this case.”

Although the firm argued that each of the five lawyers handled “an integral and necessary part” of the case, Stengel was unimpressed, saying: “We might add 'excessive and overwrought' to 'integral and necessary' as adjectives used to describe the 'management' of this case.” Fox Rothschild partner Judy McIntire Springer said in an interview that she “respectfully disagrees” with the judge's characterization of the case, and that the fees “were not excessive and we stand by them.”

The Case

Springer led a team that filed suit under the Hague Convention on behalf of Michael Clarke of Australia, alleging that his wife, Kristen Clarke, had taken their two children, Nathan, 5, and Grace, 2, to the United States and refused to return. Kristen Clarke, who was born in the United States, responded by claiming in court papers that the children would be in “grave danger” if returned to Australia because, she alleged, Michael Clarke had sexually abused his son.

In May, Stengel ruled in favor of Michael Clarke, concluding that the allegations of sexual abuse had not been proven and had stemmed from the “overtly suggestive” techniques of a Pennsylvania psychologist whose practices “were designed to lead [Nathan] to say that his father abused him.” The psychologist, Joanne Cohen Hamilton, had testified that “play therapy” in which Nathan would draw pictures, act and play games, revealed evidence of sexual abuse.

Testimony 'Not Credible'

Stengel flatly rejected Hamilton's testimony, finding that she “began with a conclusion and worked backward in an effort to build a supporting record.” As a result, Stengel said, “I found her testimony not worthy of credibility.” Stengel ordered that both children be returned to Australia within 20 days.

Kristen Clarke initially appealed Stengel's ruling, but later dropped the appeal. A court in Australia later awarded Michael Clarke full custody of both children and ordered that Kristen Clarke's visits with them must be supervised. As the prevailing party, Michael Clarke was entitled to an award of attorney fees and costs under the International Child Abduction Remedies Act.

However, when his lawyers at Fox Rothschild filed their fee petition, Kristen Clarke's newly retained lawyers from Dechert cried foul, arguing that the fees were excessive and far beyond what their client is able to pay. Dechert attorneys Thomas K. Johnson II and John S. Ghose argued that Fox Rothschild overstaffed the case, sending four lawyers to attend the three-day hearing before Stengel in April. Johnson and Ghose also said the Fox Rothschild lawyers duplicated each other's work, resulting in unnecessary fees.

Now Stengel has sided with Dechert, finding that the fees charged by Fox Rothschild were simply too high for a case that ultimately came down to just a handful of legal and factual disputes. “Michael Clarke certainly incurred attorneys' fees,” Stengel wrote, “but it is hard to believe that $163,505.89 in fees and expenses was 'necessary.'”

The Fees

The Fox Rothschild team billed for the services of five attorneys to prepare and present their case in a 2 1/2-day hearing, Stengel noted, as well as for research, telephone conferences and the preparation and filing of a petition and a memorandum of law. “There was no discovery, no significant motions and the legal and factual issues were not highly complicated,” Stengel wrote. The hearing involved testimony from just six witnesses, Stengel noted, including both parents, a psychologist for each side and two witnesses from Australia.

'Remarkable Entries'

Stengel found that the Fox Rothschild bill included “some remarkable entries,” including more than $9,500 for audiovisual specialists. However, the “truly disturbing aspect” of the bill, Stengel said, was the $128,983.50 claimed for time spent on the case by the Fox Rothschild attorneys. As lead counsel, Stengel said, Springer billed 196.5 hours at $345 per hour, and was assisted by four “supporting counsel” who billed at rates ranging from $235 to $485 per hour.

Under the law, Stengel said, the court's task was to decide what fees are “clearly inappropriate” ' an inquiry that requires a consideration of Kristen Clarke's financial circumstances as well as her motivation in creating the need for a Hague Convention petition. Stengel found that Kristen Clarke's decision to keep the children in Pennsylvania “was not proper,” but that she had “acted in the belief that she was doing the right thing.”

That belief, Stengel said, “could have been affected by any number of factors including stress ' the influence of family in Pennsylvania, a misinterpretation of her son Nathan's behavior and misplaced accusations against Mr. Clarke, to name a few.” Furthermore. Kristen Clarke's financial circumstances “appear to be dire,” Stengel said, because she is not currently employed.

Nevertheless, the Fox Rothschild lawyers argued in their brief that any analysis of Kristen Clarke's financial status must take into account the fact that the couple is in divorce proceedings and that she stands to be awarded half of a marital estate worth more than $700,000 in Australian dollars, or about $525,000 in U.S. dollars. “It would be unfair to [Michael Clarke] to have to pay his counsel fees out of his share of the assets, while [Kristen Clarke] would enjoy the full share of the equity when this litigation resulted from her conduct,” they wrote.

In an interview, Springer said she disagrees with Stengel's description of the case as “garden variety” because it involved cross-border custody issues and “serious allegations of child sexual abuse.” Springer said she and her team had a “complete victory” in which their client secured a “complete exoneration” from “the ugliest allegations imaginable.” Proving Michael Clarke's innocence, she said, requiring poring over hours of audiotapes of Nathan Clarke's therapy sessions, as well as working with an expert and a lawyer in Australia. The case was “properly staffed” with partners, associates and technical staff, Springer said, and the bills “reflect the proper amount.”

Springer said she intends to abide by Stengel's order and submit a new and reduced bill that responds to the judge's concerns.

Shannon P. Duffy is courthouse reporter for The Legal Intelligencer, an Incisive Media sister publication of this newsletter.